Ketan Himatlal Mehta Vs DCIT (ITAT Mumbai)
The appeal before the Income Tax Appellate Tribunal, Mumbai challenged an order dated 26 March 2024 of the National Faceless Appeal Centre, which had affirmed an assessment made under Section 143(3) read with Section 144B of the Income-tax Act, 1961 for Assessment Year 2020–21. The Assessing Officer had added ₹18,48,70,810 under Section 56(2)(x) on the ground that immovable property was acquired for consideration lower than its stamp duty value. This addition was upheld by the CIT(A).
The assessee, an individual, filed a return declaring total income of ₹55,48,740. The case was selected for scrutiny to verify purchase of property at a value lower than the stamp duty value. The property concerned was land at Dahisar, Mumbai. According to the assessee, the land was acquired in 2013 by a partnership firm, Vanshree Developers, for ₹12 crore under a registered agreement and was recorded as stock-in-trade in the firm’s books. After reconstitution of the firm and the death of the other partner, the assessee became the sole surviving partner and thereby the sole owner of the land.
A dispute regarding title later arose with a legal heir of the earlier owner. The dispute was settled through consent terms filed before the Bombay High Court, pursuant to which the assessee agreed to pay an additional ₹9 crore. A conveyance deed dated 19 September 2019 was executed for ₹9 crore, when the stamp duty value stood at ₹27.19 crore. The Assessing Officer adopted the stamp duty value and, after reducing the book value of ₹8.70 crore, made an addition of ₹18.48 crore under Section 56(2)(x).
